from the breaking-bad dept

So a lot of attention has been paid to the criminal complaint filed in NY against Ross Ulbricht, the alleged creator and owner of Silk Road. One of the more fascinating parts is the supposed plan to hire a hit man to kill a Silk Road user who was trying to extort Ulbricht, threatening him with revealing a large list of Silk Road users. However, as Ken White pointed out, it seemed slightly odd that the complaint describes a the murder-for-hire, but doesn't charge Ulbricht with that murder-for-hire. Now, Parker Higgins alerts us to the news that there's a separate indictment against Ulbright, filed in Maryland for a different attempted contract killing, and it's pretty crazy too.

As you may recall, in the NY complaint (yes, the NY document that has been revealed is the complaint, while the Maryland one is the indictment -- and the two things are different), when Ulbricht allegedly tried to hire someone to do the contract killing on the guy trying to extort him, he complained that the quoted price ($150k to $300k) was "too high" because he'd done it before for only $80k. You might have assumed he was simply bluffing for the sake of negotiations, but, it sounds like (shockingly), Ulbricht was actually being honest. The Maryland indictment focuses almost exclusively on the attempt to pay $80,000 to have a former employee of Silk Road killed.

You should read the whole thing yourself (embedded below), but an undercover agent had reached out to Ulbright (after a few months of communication) seeking to move a large amount of drugs, and complaining that Silk Road buyers only wanted to buy small amounts. Ulbright helped connect the federal agent to a buyer, with the help of a Silk Road employee. The indictment is a bit confusing, but it appears that that same employee received the drugs (though it's unclear if that employee was also the "vendor" who acted as the buyer). Either way, soon after that, Ulbricht contacted the undercover agent, claiming (1) that the same employee had been arrested and (2) that the employee had stolen a bunch of money. He then asked the undercover agent for help in having the employee "beat up" and "then forced to send the bitcoins he stole back."

The next day, Ulbright upped the ante, asking instead of beating up the guy, to have him killed, saying he was worried that since he was arrested, the employee would provide info to law enforcement. From there, the undercover agent and Ulbright negotiated and settled on a deal and a plan for first torturing the employee to get him to give back the stolen money, and then to kill him. The following reports read like out of a movie script:

On or about January 31, 2013, ROSS WILLIAM ULBRICHT, a/k/a "Dread
Pirate Roberts," a/k/a "DPR" communicated with the UC via the Internet, to further discuss
the murder of the Employee, and asked about the "status" of the Employee and whether the
assassins "can handle it." The UC replied that "they are pros" and that "as soon as 40 lands the
guys will go out[.]"

On or about February 4, 2013, ROSS WILLIAM ULBRICHT, a/k/a "Dread
Pirate Roberts," a/k/a "DPR" caused approximately $40,000 to be wired from Technocash
Limited in Australia to a bank account at Capital One Bank in Washington, D.C., as payment for
the murder of the Employee.

On or about February 5, 2013, ROSS WILLIAM ULBRICHT, a/k/a "Dread
Pirate Roberts," a/k/a communicated with the UC via the Internet, to discuss the
murder of the Employee. ROSS WILLIAM ULBRICHT, a/k/a "Dread Pirate Roberts,"
a/k/a "DPR" wrote that he wanted "proof of death," and instructed the UC to "ask for a video,
if they can't do that, then pictures" of the Employee's death. ROSS WILLIAM ULBRICHT,
a/k/a "Dread Pirate Roberts," a/k/a "DPR" also stated that "they should probably just give
him the note, let him use his computer to send the coins back, and then kill him[.]" ROSS
WILLIAM ULBRICHT, a/k/a "Dread Pirate Roberts," a/k/a "DPR," further explained that
"im more concerned about silencing him than getting that money and "considering his
arrest, I have to assume he will sing."

On or about February 8, 2013, ROSS WILLIAM ULBRICHT, a/k/a "Dread
Pirate Roberts," a/k/a "DPR" communicated with the UC via the Internet, to discuss the
murder of the Employee. The UC stated that the assassins were in place, but waiting for the
Employee to be alone because the Employee lived with a daughter and wife. The UC further
advised that once the Employee was alone, "they will go in and torture him to get your money[.]"
and "after that is done, then they get him out of the house and then take he somewhere where
they can kill him[.]" ROSS WILLIAM ULBRICHT, a/k/a "Dread Pirate Roberts," a/k/a "DPR"
replied, "just let me know when it's done. [W]e are still a go."

On or about February 12, 2013, ROSS WILLIAM ULBRICHT, a/k/a "Dread
Pirate Roberts," a/k/a "DPR" communicated with the UC via the Internet, to discuss the
murder of the Employee. The UC stated that the Employee "is still alive but being tortured" for
the stolen money, and that the assassins "are good; they should break him." ROSS
WILLIAM ULBRICHT, a/k/a "Dread Pirate Roberts," a/k/a "DPR" replied, that
"shouldn't be hard[.]"

On or about February 16, 2013, ROSS WILLIAM ULBRICHT, a/k/a "Dread
Pirate Roberts," a/k/a "DPR" communicated with the UC Via the Internet, to discuss the
murder of the Employee. Via the Internet, the UC transmitted staged photographs of the
Employee being tortured to ROSS WILLIAM ULBRICHT, a/k/a "Dread Pirate Roberts,"
a/k/a "DPR." After seeing the photographs, ROSS WILLIAM ULBRICHT, a/k/a "Dread
Pirate Roberts," a/k/a "DPR" stated that he was "a little disturbed, but I'm ok," and that "I'm
new to this kind of thing is all[.]" ROSS WILLIAM ULBRICHT, a/k/a "Dread Pirate
Roberts," a/k/a "DPR" added that "I don't think I've done the wrong thing[.]" and "I'm sure I
will call on you again at some point, though I hope I won't have to[.]"

On or about February 19, 2013, the UC sent an email to ROSS WILLIAM ULBRICHT, a/k/a "Dread Pirate Roberts," a/k/a "DPR" stating that "[the Employee] is dead[,] they killed him this weekend[,] don't have details yet, and I'm waiting for a photo[.]"

On or about February 21, 2013, ROSS WILLIAM ULBRICHT, a/k/a "Dread
Pirate Roberts," a/k/a "DPR" communicated with the UC via the Internet, to discuss the
murder of the Employee. The UC told ROSS WILLIAM ULBRICHT, a/k/a "Dread Pirate
Roberts," a/k/a "DPR" that the Employee "died of asphyxiation/heart rupture" while being
tortured. Via the Internet, the UC transmitted a staged photograph that purported to depict the
Employee's dead body. After receiving the photograph, ROSS WILLIAM ULBRICHT, a/k/a
"Dread Pirate Roberts," a/k/a "DPR" stated that "I'm pissed I had to kill him but what's
done is done[.]" and that "I just can't believe he was so stupid[,] . . . I just wish more people had some integrity[.]"

On or about February 28, 2013, ROSS WILLIAM ULBRICHT, a/k/a "Dread
Pirate Roberts," a/k/a "DPR" communicated with the UC Via the Internet, to discuss the
murder of the Employee. The UC told ROSS WILLIAM ULBRICHT, a/k/a "Dread Pirate
Roberts," a/k/a "DPR" that the Employee's body was completely destroyed to eliminate
evidence and asked to make sure the second $40,000 payment for the murder of the Employee
was sent.

On or about March 1, 2013, ROSS WILLIAM ULBRICHT, a/k/a "Dread
Pirate Roberts," a/k/a "DPR" caused approximately $40,000 to be wired from Technocash
Limited in Australia to a bank account at Capital One Bank in Washington, D.C. as payment for
the murder of the Employee.

You have to imagine screenwriters in Hollywood are already busy at work turning this into a movie. That said, if the feds faked that employee's death all the way back in February, and then were able to keep it quiet all this time, it's fairly amazing how long they've been tracking Ulbricht -- and doubly amazing that he didn't leave the country (especially after Homeland Security officials showed up at his apartment in July).

Probably a pirate and a CIA agent.

Whenever you hear about a particularly brazen criminal, they likely have official cover. Think Bernie Madoff: despite being reported to SEC, he continued to operate for years. Near conclusive if visited by federal agents and didn't rabbit.

Re: Re:

"No in the Masnick world, prior restraint and ex parte domain name seizures are only a free speech issue if it impacts upon the infringement of copyrighted works."

In the case discussed in this article there was no domain name seizure. SilkRoad was a TOR hidden service and DNS is not used to access them. It makes no sense to say the domain name was seized. What was seized were the servers that implemented that hidden service.

Re:

The available information at the time, as well as professional analysis, supported what he said, which was not delivered as a concrete statement of fact. It was couched as a supposition based upon all available information.

entrapment

In most states, a successful entrapment defense requires the defendant to prove three things:

* The idea of committing the crime came from law enforcement officers, rather than the defendant.

* The law enforcement officers induced the person to commit the crime. Courts have traditionally maintained a high burden of proof for inducement. Simply affording the defendant the opportunity to commit the crime does not constitute inducement. For inducement to be proved, officers must have used coercive or persuasive tactics.

* The defendant was not ready and willing to commit this type of crime before being induced to do so. If an undercover cop bought cocaine from a person carrying a kilogram of the drug, the seller could not plead entrapment, even if coercion were involved in the sale, since his intent to sell was clear. Most courts also allow a defendant's predisposition to be demonstrated through prior conduct or reputation.

Call me for being off-topic but notice they mention undercover agent quite a few times. No direct fiber tapping, no getting direct access to major servers, no mass surveillance. Just plain old investigative work and a few clues left in the way.

More on topic it's just business as usual. We are not talking about a regular market so you will find everything. It's not shocking he hired people to kill it's just wrong. And now he's gonna pay for his crimes. Running the market itself (the service) isn't anything wrong for me regardless of how it's used as many people seem to imply. Not complying with law enforcement on REASONABLE warrants and engaging in criminal activities (ie: murder) is what is wrong here.

Op Sec -- Subtle Failures

Analyzing from the standpoint of OpSec, notice the FBI strategy here:

1) Real addresses of buyers weren't hard to get...it was the sellers who were hard to find. You have to deliver real goods to real addresses, and these can be visited and watched. The goods usually have to be picked up to be useful.

2) Sellers, who became buyers, were straightforward to find. Thus, the gov't sold to a distributor to get access. The distributor on silk road buying from anyone on Silk Road was a serious mistake. The gov't hit a jackpot when the distro they caught was an admin and DPR wanted him dead.

3) They then manipulated DPR, so he became a buyer, probably from a compromised seller. [Claim: Canadian murder was a gov't scam, looks too much like entrapment, since the blackmailer with the customer info was probably a cop].

4) DPR trusted his sellers. Forgot to vet them by, for example, a few deliveries without a hitch.

5) DPR trusted his admins. His admins were also sellers. Big Opsec mistake, this let FBI hit the jackpot busting a seller.

6) Trust does not scale. The larger the circle of trust, the more likely someone in it isn't trustworthy. NSA, I am looking at you, too!!!

Re: Op Sec -- Subtle Failures

2)and 5) I agree that an SR vendor selling to another SR vendor was risky. I think that this was obvious to DPR who made an effort to detect law enforcement activity on the site. Vendors that showed an interest in selling large amounts for resale should have been under suspicion. I can't imagine that DPR would knowingly let admins both buy and sell on the site. The following could be an explanation. DPR suspected "the employee" of being dishonest. DPR set him up by directing him to be a direct middleman in the 1KG cocaine buy from the suspect vendor (UC). Employee gets busted and DPR performs a charade where he directs him to be tortured and killed by UC as a way of ferreting out whether UC is really undercover. What dangerous information could the employee have access to since TOR allowed anonymity of both vendors and buyers? Remember it is only a single vendor that gets some real address from a buyer. Also, the employee is in a Maryland jurisdiction (thus the indictment from a Maryland Grand Jury for this murder for hire) and did not access to the server for the website which is in some foreign country. Doesn't it seem odd that all of a sudden DPR is asking a vendor to perform a murder? Isn't it also stretching credibility to expect just pictures to be proof of a murder. Cmon, anyone who has ever seen a movie know that is easily faked. DPR's mistake in acting out this charade was that now he has been indicted for a murder for hire even when no murder ever took place.

"No in the Masnick world, prior restraint and ex parte domain name seizures are only a free speech issue if it impacts upon the infringement of copyrighted works."

I think many would agree with you that Masnick is often naive and simplistic in his analyses. I am wondering if you could break down your critique a bit here for myself and others not familiar with ex parte domain name seizures and what Masnick is missing in terms of what is at stake here. I know you are hinting at larger implications and I feel many readers will benefit from some additional insight.

Re:

My comment centers on the issue that there's mighty fulmination by Masnick and his coterie regarding domain seizures of infringing sites over "free speech" concerns. Often, it is ancillary forums and discussion boards that are cited as "collateral damage" of persons free speech rights.

Re:

I think many would agree with you that Masnick is often naive and simplistic in his analyses. I am wondering if you could break down your critique a bit here for myself and others not familiar with ex parte domain name seizures and what Masnick is missing in terms of what is at stake here. I know you are hinting at larger implications and I feel many readers will benefit from some additional insight.

The gist of the argument is that since there is protected speech on the forums that the domain name points to, then that means that a warrant based upon probable cause is insufficient to effect the seizure of that domain name. This stems from the Supreme Court's jurisprudence as to seizures of presumptively protected speech--and by extension, instrumentalities--in the context of alleged obscenity.

What Mike and the rest seem to miss is that the Court's logic in that context turns on the inherent difficulty in separating obscene from nonobscene speech (and thus unprotected from protected speech). The extraordinary procedural safeguards are needed there because relying on mere probable cause that something is obscene runs too great a risk that speech which is ultimately protected will be restrained. But such is not the case when the speech is easily determined to be unprotected, as is the case here with soliciting murder-for-hire or with selling illegal drugs.

The other thing the argument misses is that whether there is protected speech on the site is irrelevant. The issue is whether the speech that drew the remedy in the first place is protected. The incidental restraint on protected speech doesn't mean that the domain name can't be seized, and it doesn't mean that more procedural safeguards are needed. The only time you get extraordinary procedural safeguards is when the speech at issue--the speech that drew the remedy in the first place--is such that it's difficult to determine whether it's protected or not. That's not the case here.

Re: Re: Re:

You keep saying "seems to miss" as if nobody here has thought of those things. I believe that you are incorrect, and my evidence is the lengthy discussions here on these very points.

Sure, I remember the discussions. Discussions that cherry-picked quotes from obscenity cases. Discussions that ignored the reasoning behind the need for extraordinary procedural safeguards when the context is obscenity. Discussions that ignored the case law where the context wasn't obscenity and the courts said no extraordinary procedural safeguards were needed. Discussions that ignored case law that said what matters is the speech that's at issue and not other speech that is incidentally affected that could even be protected speech. Discussions that ignored the fact that ex parte seizures have been a part of copyright law for over a century. Discussions where you guys couldn't find one single case where a court said extraordinary procedural safeguards were needed when the context was copyright infringement and there was no viable fair use defense. Sure, I remember.